The Guggenheims had to learn fast – both the language and local business practice – but on the other hand they were free of all the laws and taxes imposed on Jews back in Switzerland, so there was a sense of liberation which made the graft easier to bear, and also motivated them. For Meyer especially this new beginning was stimulating, and he quickly discovered within himself a great aptitude for business. Iron stoves were rapidly replacing the old open hearths, and one of his best-selling lines was a form of blacklead for cleaning them. Meyer saw that if he could find a way of making his own polish, rather than buying it from the manufacturer, he could make a far greater profit while keeping his retail price low. In those days there was no law restricting such a practice, and history doesn’t relate how the manufacturer reacted to the loss of one small client, but Meyer took a can of the stuff he was buying to a friendly German chemist, who analysed it for him. Thus armed with the recipe, and after several messy experiments in his scant time off, Meyer not only produced his own stove blacking, but improved upon the original by making a version that would stay on the stove, but not on the hands of the person cleaning it. Before long he was selling his polish in such quantities that Simon gave up his own round and stayed home to produce it, using a second-hand sausage-stuffing machine. Soon Meyer was making eight to ten times the profit he had formerly made.
He didn’t stop there. Coffee was already taking hold as the favourite drink of America, but real coffee was extremely expensive. Poorer people drank coffee essence, a liquid concentrate of cheap beans and chicory. Meyer’s step-brother Lehman had already started to produce some of this at home, and now Meyer added it to his list of wares. By this time he was an experienced salesman with a reliable body of customers who trusted him. Four years after getting off the boat he was, at twenty-four, an established figure in the stoveblack and coffee-essence businesses. He married Barbara at Philadelphia’s Keneseth Israël Synagogue and the newlyweds set up house for themselves. It was a good match and a successful marriage. Barbara’s gentle and selfless personality made her the perfect complement to Meyer. She never questioned his authority and always supported him. She was a good mother to their children, and if she had a fault at all it might have been to over-indulge her younger offspring. Meyer, on the other hand, could be a stern disciplinarian. His youngest son, William, recalls in his memoirs that his father had ‘no tendency to spare the rod. Whippings were not infrequent; he employed a leather belt, a hairbrush, or any convenient paddle whenever the need suggested itself to him … None was allowed to doubt for long that his father’s word was law or to think that that law might be broken with impunity.’
From the start, Barbara showed an inclination to charitable work, which increased as her means did, though throughout her life she showed no inclination to use the money her husband earned to spoil or pamper herself. Just as Meyer established the business empire, ruthlessly developed by the more able of his sons after his death, so perhaps did their mother’s influence incline them to set up the charitable foundations for which the family remains famous, after they had made their fortune.
In the course of the next twenty years, Meyer and Barbara produced eight sons, including twin brothers, and three daughters. One of the twins, Robert, died in childhood, and their daughter Jeannette only lived to be twenty-six. But the survivors would grow up to be the heirs and developers of a business empire which was among the biggest half-dozen in America a century ago, and which was gathering strength when Meyer’s granddaughter Peggy was born.
Meanwhile, Meyer expanded and diversified his business interests, always driven by the desire to increase the security of his position in society by making ever larger sums of money. He didn’t necessarily cling to it – the years following his marriage would be punctuated by a series of house moves which tracked his rise in Philadelphia society – but he was extremely careful with it, and would never spend it unless there were some material, political, business or social gain to be made. One of his favourite proverbs came straight from the rural peasantry of his birth: ‘Roast pigeons don’t fly into your mouth by themselves.’ This dictum was one which he tried to inculcate into each of his sons: with Isaac, the oldest, born in 1854, he was not altogether successful, but with the three middle sons, Daniel (1856), Murry (1858) and Solomon (1861), he had greater success. The surviving twin, Simon (1867), also remained within the family fold; the surviving daughters, Rose and Cora, born in 1871 and 1873, following nineteenth-century practice both made good marriages and remained a credit to their parents. Benjamin (1865) and William (1868), however, followed their own paths, as we have seen.
As for education, Meyer, unlike his wife not particularly observant of his faith, chose the best for his children, regardless of religious affiliation, and they were sent to Catholic day schools, which paved the way for their disassociation from the religion and mores of their forefathers. Though Ben and William enjoyed the advantages of further education, only William showed any serious propensity for scholarship; the others were encouraged by their father to enter the family firm as soon as they could, and learn business through hands-on experience. The older boys, who worked hard alongside their father, were later aggrieved when Meyer decided to divide profits equally between all his sons; but Meyer countered their objections by pointing out that in time it would be the younger ones who would carry the burden of the work. He alluded to another piece of peasant wisdom: a bundle of sticks cannot be broken: individually, the sticks can be broken. The older boys knuckled under, but were not reconciled.
In the 1870s, having made small fortunes by the standards of the time in ventures as diverse as lye (used in soap-making) and the burgeoning railroads, Meyer turned his attention to lace. In 1863, all proscriptive laws against the Jews in Switzerland had been repealed, and one of Barbara’s uncles had established a lace factory back home. With a supplier established, Meyer now entered the lucrative lace business. His flair for diversification once again paid off, to the extent that by 1879 he was worth approaching $800,000. But his greatest gamble was yet to come. Two years later he was offered a third of the interest in two silver and lead mines outside the boom town of Leadville in Colorado by a Quaker friend, Charles Graham. Graham had borrowed money to buy two-thirds, but the mines, called the ‘A.Y.’ and the ‘Minnie’ after the original prospector and his wife, who had sold out for very little, were not doing well, and Graham couldn’t afford to repay the loan on half his share when it became due. William Guggenheim records that Graham’s price was $25,000, though it may have been as little as $5,000 – sources differ. In any event Meyer, who knew nothing about mining, thought it was worth the risk. His other partner was one Sam Harsh.
Before too long Meyer made his way to Leadville, in the wake of the disturbing news that the mines were flooded. To pump them out would cost $25,000, more than his two partners could afford. Meyer hesitated, but reflected that after all the investment in relation to his capital was still relatively small – and maybe too he was following what had so far proved to be an unerring instinct. He had steam-pumps developed for the job, the forerunners of a hydraulic power system which would be the cornerstone of his son Benjamin’s later business interests. He bought out his partners, had the mines cleared and repaired, watched the expenses mount, and worried and waited. But he didn’t have to wait long. In August 1881 rich seams both of lead and silver were struck. Soon the mines were bringing in $200,000 a year; by the end of the decade the yield had risen to $750,000.
Based on his experience with stove polish, Meyer saw that if he established his own smelting business, he need not pay anyone to process his ore for him. With the help of his then twenty-three-year-old son Benjamin, a smelter was established at Pueblo at the end of 1888. In the same year the family moved to a new home and new offices in New York, which had by now gained the ascendancy over all other cities in the east as the centre of commerce.
Lace was forgotten. Mining became the centre and the soul of the Guggenheim firm. The world was its unexploited oyster, and with the funds available to them